January proved to be quite the month for changes in the tech space. Between industry events, acquisitions, tech shifts and cybersecurity breaches, there was no loss of things to keep track of. From a personal perspective, I ended up taking 18 flights in January alone! Let’s get into each of these.
In the last newsletter, I shared insights to The CIO Playbook for 2024. If you missed that, take a moment to check it out and share your thoughts.
Right on the heels of the last CIO In The Know newsletter was the Consumer Electronics Show (CES) in Las Vegas. For those that are not familiar with CES, it is heavily focused on consumer technology. As such, I often get asked why I attend when my focus is heavily on enterprise technology. The answer is simple: Consumer trends can often indicate or influence the direction of enterprise tech. We have seen this several times over the years and as the home and work worlds meld together closer than ever, I feel that consumer tech trends could be a larger influence on enterprise over time.
Consumer Electronics Show and World Economic Forum kick off the year
The CES event seems to be back to its pre-pandemic, massive size spanning the Las Vegas strip including LVCC, Sands, Aria and Mandalay convention centers. This year saw a large focus on health tech, IoT/ edge, drones, mobility, robotics as well as AI. Beyond tech, there were insights into who is buying tech and how we might see this evolving. There are currently ~69 million Gen Z (11-26 yo) in the US. 86% of US Gen Z say tech is essential to their lives. They are also more likely to splurge on tech. 90% of global Gen Z live in emerging markets. Today, there are 5.4 billion people connected to the internet with 1 billion more expected by 2027. It will be interesting to see how this impacts each of our organizations.
As expected, AI played a significant role at CES. The CES team shared data about consumer sentiment regarding AI, the top three categories were Innovative, Futuristic, and Intelligent. In terms of concerns, the top categories were Privacy, Disinformation and Safety. These are important characteristics to consider with enterprise technology as well.
Following CES, the World Economic Forum (WEF) congregated in Davos again this year with the focus on regaining trust. With so much disinformation and concern rising around generative AI, as just one example, regaining trust is quickly becoming a core issue for enterprises and their respective data.
One of the core issues facing WEF is their relevance moving forward. There was a lot of chatter in past years and rising again this year about whether WEF has lost touch with the core issues facing societies, economies, industries, and humanity. It seemed like there was a little bit of everything at Davos this year from wine forums to bee keeping to data and cybersecurity. Is WEF the right forum for addressing core issues facing us moving forward? While it is unclear, a body or congregation is needed as we have hard problems to solve.
HPE acquires Juniper
In case you missed the news, HPE announced their intent to purchase Juniper. The crux of the acquisition is for HPE to acquire innovation in AI and enhance the network aspects of their portfolio. This has largely been a gap in HPE’s portfolio for some time. For example, HPE’s Greenlake offerings and portfolio have largely focused on compute and storage. Juniper brings an incredible wealth of experience in leveraging AI in a network setting. The question will be, can HPE parlay this acquisition into benefiting the entire Greenlake portfolio? In theory, it should. There are still core missing points to HPE’s portfolio. Juniper’s Mist AI platform could provide a catapult to move things forward for HPE and eventually customers.
SAP restructuring and executive shifts
SAP announced a restructuring and executive changes. First up were the executive changes. Thomas Saueressig has moved into a new executive board responsibility to accelerate cloud growth and adoption. Muhammad Alam, formerly heading up SAP’s Intelligent Spend and Business Network (ISBN) has taken over Thomas’ former role leading product engineering.
The shift is interesting in that it shows SAP elevating their focus on cloud solutions and customer growth around cloud.
The second announcement was SAP’s ambition efforts leading into 2025. The overall announcement was SAP’s acknowledgement of the need to restructure in order to address the next stage of the company and best serve customers. Most focused on the 8,000 jobs that would be impacted. However, SAP also mentioned that they expected to end 2024 with the same number of jobs as before the restructuring. So, the net-net is a wash in terms of jobs. The real news here is that SAP is acknowledging the need to refactor the company for the changing customer demands and how their technology is used by customers. That’s a big deal for a company like SAP.
Genesys acquires Radarr
Genesys announced their intent to acquire Radarr to augment their social and digital listening through AI-based tools. As customers drive to better understand customers from a holistic perspective, acquisitions like this provide a multi-channel perspective.
Fallout from VMware acquisition by Broadcom
Broadcom completed their acquisition of VMware and has started making dramatic changes to the impact for customers. First was the move from perpetual licensing to subscription. Second was the shift…and exclusion of many partners. Third was pricing increases to customers. While none of these are necessarily surprising, to say customers are rolling with the changes would be misleading. The changes are spooking customers by creating a toxic soup that leaves customers and partners incredibly frustrated and unhappy. Switching costs for virtualized workloads are not trivial and Broadcom is likely playing off that sticky reality. However, customers are reaching a breaking point and actively evaluating ways to replace VMware as quickly as they can. Having been a VMware customer from the very early days of VMware Desktop and eventually Server, it is sad to see these changes play out.
Cybersecurity breaches
Recently, there has been a string of very public cybersecurity breaches of Microsoft, HPE and Okta. The breaches, in relatively quick succession are giving CIOs and enterprises a moment of pause. Cybersecurity has long-since been a top discussion point among boards and executive teams. The recent breaches by such high-profile companies are causing folks to rethink how they are approaching cybersecurity.
Google Cloud eliminates switching costs
Egress costs, or pulling data from a public cloud provider is one of the biggest costs for public cloud customers. Google announced that they are eliminating egress costs if you want to pull data from their public cloud service. That’s the summary soundbite version you may have seen. However, the reality is a bit more nuanced and important to understand.
In order to proceed, the customer needs to apply by submitting a form. Once accepted, move their data within 60 days and terminate their Google Cloud agreement. That’s much different from what many perceive Google was announcing.
But all is not lost. This is still a great move by Google and should drive the market to push toward further elimination, or reduction at a minimum, of egress fees across providers. Google drew a line in the sand. I expect others to take it further…including Google.
CIO Water Cooler Talk
There is a lot on the table for CIOs. Kicking off 2024, the conversation continues to mature around AI and specifically generative AI. Many AI experiments are turning into production functionality as they mature and evolve. Of the efforts moving to production, they are focused on two of the top three areas: Content creation and customer experience. That is for bespoke applications and services. There is still a lot of new functionality coming from existing enterprise software vendors. Beyond that, there are AI shifts in balance and model selection coming in short order. Model selection is not just Cohere vs OpenAI vs Gemini. It is partly that and partly to understand the right size of model to use. Smaller models can provide a better price/ performance than larger models with similar degrees of accuracy. It’s about knowing which one to use for which purpose.
Driven by the continued economic uncertainty, CIOs are also digging into the concept of FinOps. This concept picked up steam last year and is progressing this year as leaders rethink where their spend goes. One area that CIOs continue to question is around cloud spend. The problem is that much of the conversation is around ‘cost’ and not ‘value’. It is one of the shifts I expect to see more of in 2024.
Beyond that, there is new legislation around AI that is starting to come out. The EU AI Act is just one example. More are making their way through the various legislative bodies. CIOs need to ensure they have a framework and process to keep on track of these shifting requirements. Relying on your audit or legal group alone is not adequate. A partnership between groups is ideal.
Lastly, in the same vein of legal risk, there has been quite a bit of conversation about liability for specific roles. The recent announcement from the SEC specifically calling out the SolarWinds CISO, by name, has given CIOs and CISOs a moment of pause. There is a lot riding on decisions and communication. Now, the SEC has demonstrated they are willing to go into the organization to call out individuals beyond the CEO or CFO. One of the first steps is to ensure that your D&O insurance covers critical roles like the CIO & CISO.
What’s your take?
This is just a snapshot and there is a lot to unpack here. Looks for more unpacking in future missives.
Now it’s your turn. I’d love to hear from you and your perspective.
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Originally posted on LinkedIn: https://www.linkedin.com/pulse/cio-know-starting-2024-new-focus-technology-tim-crawford-yhmvc
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